Commentary – Paraguayan Supreme Court Declares Decrees on Private Copy Remuneration Unconstitutional

In its landmark decision No. 346/2025, the Constitutional Chamber of the Supreme Court of Justice of Paraguay upheld a constitutional challenge filed by Importadora Audi S.A. and Importadora Américas S.A. against Decrees No. 4212/2015 and 1925/2019, which regulated the private copy remuneration system under Chapter IV of Copyright Law No. 1328/1998. The Court declared both decrees unconstitutional and inapplicable to the plaintiffs.

The contested decrees had established a compensatory levy on various electronic devices and media considered suitable for private copying (including imported automobiles with multimedia systems), assigning collection authority to collective management organizations and requiring pre-payment of the levy upon importation or first domestic commercialization.

The plaintiffs argued that the decrees violated multiple constitutional principles, including the principle of legality, the presumption of innocence, the guarantee of legal certainty, and the right to equality. They contended that the decrees imposed financial burdens on importers without a valid legal basis, improperly shifted the obligation to pay compensation to parties not engaged in private copying, and created an arbitrary system disconnected from actual use of copyrighted content.

In a unanimous decision, the Court agreed with the plaintiffs and held that the Executive Branch had overstepped its constitutional authority. The Court ruled that Decree No. 4212/15 altered the target that law purportedly regulates, by replacing the legal condition for compensation—private reproduction of copyrighted works—with importation or manufacturing. This substitution, the Court found, exceeded regulatory powers and amounted to an unconstitutional legislative act by the Executive.

Importantly, the Court clarified that while the private copy remuneration right established under Law No. 1328/1998 is constitutionally valid, in view of a private, non-tax nature, its implementation must strictly adhere to the legal framework and cannot be expanded arbitrarily through administrative regulation. It further found that the second and third paragraphs of Article 34 of the law, which linked payment to the mere possession of devices or media, violated the constitutional principles of equality (Article 46) and fairness, by indiscriminately turning importers into debtors regardless of actual use or intent.

The Court ultimately declared inapplicable both Decree No. 4212/2015 and Decree No. 1925/2019 with respect to the plaintiffs and also declared unconstitutional the aforementioned provisions of Article 34. This landmark ruling reaffirms the primacy of constitutional principles in intellectual property regulation and sets a clear boundary against regulatory overreach.

For copyright stakeholders and policymakers, this decision carries significant implications. It confirms that while private copy remuneration systems may be constitutionally permissible, their structure must respect the principles of legality, proportionality, and due process. The ruling underscores the need for legislative—not merely executive action— when designing mechanisms that impose financial obligations on private actors.

This decision marks a pivotal moment in Paraguay’s intellectual property jurisprudence and will likely influence ongoing regional debates on the legal design and enforcement of private copy levies in Latin America.